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What is Return on Investment (ROI)? How is it important to marketing?

What is Return on Investment (ROI)? How is it important to marketing?

Any marketing, measuring and evaluating the results will surely make future marketing planning more effective. The help in measuring returns is the Return on Investment (ROI) calculation that will make the results clearly visible. And can compare each type of marketing plan to see which one works better

What is Return on Investment (ROI)?

Return on Investment, or ROI, is a measure of return on investment, that is, when we invest something. We want to know or assess whether an investment is worthwhile or not. Therefore, the return is measured. All types of investments that use capital can measure ROI, whether it is Google Ads (AdWords), TV advertising. Including the boot The higher the ROI, the better. Because it means less investment But got a lot of results

Calculation of Return on Investment (ROI)

The ROI is calculated by the following formula:

Net Profit = Revenue - Cost

ROI = (Net Profit / Cost) X 100

For example, Company A invested in a booth with a capital of 20,000 baht, causing customers to be interested in the product and bought the product 60,000 baht.

Net profit = 60,000 - 20,000 = 40,000 baht

ROI = (40,000 / 20,000) X 100

ROI = 200%

Any investment with a ROI of more than 100% is considered a very worthwhile investment.

The Importance of Return on Investment (ROI)

ROI is very important to marketing. Especially nowadays that it is popular to do online advertising such as Google Ads (Adwords) and Facebook Ads because it allows you to know the revenue received from advertising. Including making it known whether the creation of a booth campaign was successful or not. And it also makes it possible to compare which type of campaign has better results. To be able to decide which campaign to invest in And cancel unsuccessful campaigns Resulting in better marketing planning And have more sales growth

It can be seen that ROI plays an important role in doing business. If doing business without caring about what the return on investment is Is it worth it? Growing your business can be difficult. Because I can't see any direction in which marketing will be more successful

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